Lockheed, Hughes to Get Back on Track : Diversification: The two firms are linking up with a rail car builder as one method of moving away from the military and aerospace fields and into mass transit.

In another effort by aerospace firms to diversify into non-defense fields, a Lockheed Corp. unit and Hughes Aircraft will team up with rail passenger car builder Morrison Knudsen Corp. to develop high-technology products for mass transit.

Hughes and Lockheed will apply their space- and military-related technology to the transit business, according to a statement issued by Morrison Knudsen, which is interested in building portions of Los Angeles County’s rail passenger network.

“Symbolically, it’s very important,” said Ed McSpedon, president of the Rail Construction Corp., a division of the Los Angeles County Transportation Commission. “We have two major visible local aerospace companies. We couldn’t have asked for anything more.”

He said Lockheed and Hughes approached the commission after it announced that it was looking for some local aerospace companies to help develop the region’s 400-mile rail-transit network. The two companies talked generally about several fields they may pursue, from building empty rail-car shells to developing sophisticated electronic sensors that could prevent trains from hitting object on their tracks.

As part of their first venture, the trio of companies will seek to participate in the Advanced Transit Product Development Program. The program was created by the commission to create high-tech products that can be used in mass transit and manufactured in the region.

Hughes spokesman Richard Dore said the firm would locate its portion of the transit work at its operations in Fullerton, which is conducting most of the firm’s transportation projects with General Motors, which owns Hughes. Dore said details about Hughes portion of the agreement were not available.

The Los Angeles County Aerospace Task Force, projecting that the current aerospace bust could severely damage the local economy, recommended last spring that the region become a center for mass transit production.

But it has not been clear, until now, whether aerospace firms wanted to get involved in the industry or whether they were capable of converting their resources quickly to a new product. After the 1970s aerospace downturn, Grumman Corp. attempted to enter the mass transit market by manufacturing inner-city buses, but lost money in the venture and eventually left the business.

In addition to Hughes and Lockheed, Northrop has been discussing a possible joint venture with the Japanese mass transit firm Sumitomo. Those talks have been going on for several months. Lockheed officials could not be reached.

Times staff writers Mark Stein and Ralph Vartabedian contributed to this story.